Vocabulary

1. Find English equivalents to the following Russian expressions:

• практическая противоречивость =

• частично относятся к =

• общие положения =

• аналогично =

• предположительно более разносторонние =

• обусловливать довод, доказательство, аргумент =

• нестабильность процесса изобретения =

• ответить на вызов =

• конечный результат =

2. Find synonyms for the following word combinations using the vocabulary of the text:

• sustained development =

• impel the development =

• refer smth to =

• further research =

• related activities =

• taking this flaw into account =

• take advantage of =

• peculiar (individual) differences =

3. Paraphrase the underlined expressions using synonymous clichés

1. A substantial body of theoretical and empirical research examines the relationship between firm size and innovation activity.

2. Given the variety of definitions and measures of innovation, this study examines process technology innovations at the firm level.

3. A second argument conditions the first by pointing out that …..uncertainty in the invention process, and in subsequent demand, may diminish established firms’ incentives to innovate.

4. Few empirical studies test these competing arguments.

5. A third area of inquiry describes how the complexity and bureaucracy that emerges within firms as they increase in size inhibits subsequent innovation activity.

6. The lack of attention paid to the latter firm-level differentials is troublesome for at least two reasons.

4. Suggest as many as possible ways to express the following

Technology scholars state that

At least three research streams examine

This work suggests

Other work emphasizes that

5. Translate the underlined patterns into Russian

Speaking and vocabulary

1. Fill in the table making a list of clichés used in the article and categorizing them accordingly

Research stream	Fundamental proposition
	Contributions to the stream development
	Critical evaluation
Research stream	Fundamental proposition
	Contributions to the stream development
	Critical evaluation
Research stream	Fundamental proposition
	Contributions to the stream development
	Critical evaluation

Writing

1. Write a 120-word summary of the text, stating the topic and the problem.

TEXT 3 SPEED OF INTEGRATION AND THE ROLE OF INTERNAL AND EXTERNAL RELATEDNESS

Read the Text and do the tasks afterwards.

(An excerpt from Is Speed of Integration Really a Success Factor of Mergers and Acquisitions? An Analysis of the Role of Internal and External Relatedness by C. Homburg and M. Bucerius Strategic Management Journal, Strat. Mgmt. J., 27: 347–367 (2006))

Previous research on mergers and acquisitions has neglected the issue of speed of postmerger integration by and large. This paper argues that there are benefits and detriments associated with speed of integration. Thus, in some situations speed may be highly beneficial whereas in others it may be harmful to the success of a merger or acquisition. It is argued that the benefits and detriments of speed of integration depend on the magnitude of internal and external relatedness between the merging firms prior to the merger or acquisition. Results from a survey of 232 horizontal mergers and acquisitions show that speed is most beneficial when external relatedness is low and at the same time internal relatedness is high. In contrast, speed is highly detrimental in the case of low internal and high external relatedness.

LITERATURE REVIEW

In this section we first review the literature dealing with speed of integration and then provide an overview of the literature on relatedness.

Literature on speed of integration

A number of management consulting firms have published empirical studies on M&A performance which also consider the role of speed as a potential success factor (Fujitsu Consulting, 2001; Mercer Management Consulting, 1997; PriceWaterhouseCoopers, 2000). On an overall basis, these studies provide some evidence that speed of integration may be positively correlated with M&A success. It is typically argued that a quick implementation of changes is beneficial because it minimizes the amount of uncertainty among members of the combining firms. However, although being based on large samples, these studies do not meet basic requirements on empirical academic research in terms of sampling, construct measurement, and data analysis. Additionally, the issue under which circumstances speed may be more or less beneficial for M&A success is not addressed in these studies.

The limited academic work that addresses speed of integration includes studies by Bragado 1992), Gerpott (1995), Haspeslagh and Jemison (1991), Homburg and Bucerius (2005), Inkpen, Sundaram, and Rockwood (2000), Olie (1994), and Ranft and Lord (2002). Inkpen et al. (2000) conducted a case-based analysis of various acquisitions of six technology-based companies. These authors identified speed of integration as an important driver of successful PMI. On the other hand, Olie (1994) notes, on the basis of several case studies, that a slow integration process can be appropriate to minimize conflicts between the merging partners. In line with that, Ranft and Lord (2002) found (also on the bases of several case studies) that a slow integration can enhance trust building between the merging firms’ employees. These researchers’ work is, however, entirely qualitative in nature and does not provide a statistical analysis of the relationship between speed of integration and success. Gerpott (1995) conducted a large-scale empirical study focusing on the integration of R&D functions among merging manufacturing firms. He found that centralization of R&D in the PMI phase and speed of integration have a joint positive impact (i.e., an interaction effect) on M&A success. Also, based on several case studies, Haspeslagh and Jemison (1991) argue that the type of acquisition integration approach (including speed of integration) depends on the joint influence of the need for strategic interdependence and the need for organizational autonomy of the involved firms. Bragado (1992) provides an extensive discussion of the ‘correct speed for PMI.’ He argues that under certain conditions a slow approach to PMI may be superior to a fast approach. His key argument is that a period of studying and understanding between the employees of the two companies is often needed. This author further argues that the appropriate speed of integration depends on the ‘fit’ (Bragado, 1992: 27) of the involved firms, especially on their cultural fit. The work by Haspeslagh and Jemison (1991) and Bragado (1992) is relevant for our study because these authors mention the key proposition of our work that the effect of integration speed on M&A success depends on the level of relatedness. However, these authors do not study this proposition based on specific hypotheses and large-scale empirical evidence.

A large-scale empirical study by Homburg and Bucerius (2005) analyzed performance implications of postmerger marketing integration and explicitly addresses the issue of integration speed. Results show a weak positive direct effect between speed of integration and market-related performance after a merger or acquisition. Based on their findings these authors call for more research related to the role of time in mergers and acquisitions. In summary, we find that research on performance implications of speed of integration is very limited. More specifically, we are not aware of any empirical academic study on M&A performance where speed of integration is considered in depth.

Literature on relatedness

While academic research on speed of integration is scarce, the role of relatedness has attracted some attention in M&A research (e.g., Lubatkin, 1987; Chatterjee, 1986; Seth, 1990). Relatedness refers to aspects outside the two organizations (external relatedness) as well as to aspects inside the two organizations (internal relatedness). Research related to the first category (external relatedness) has focused on relatedness of the involved firms concerning target markets and the firms’ market positioning in terms of product quality and price. Concerning the first facet, Capron and Hulland (1999) and Capron, Mitchell, and Swaminathan (2001) provide evidence that a high level of external relatedness with respect to target markets is associated with a high potential for synergy realization. On the other hand, a study by Shelton (1988) reveals that a significant synergy potential can also exist in the case of low external relatedness with respect to target markets. Research looking at the second facet (i.e., external relatedness with respect to the merging firms’ market positioning) has also yielded conflicting findings. While a study by Hagedorn and Duysters (2002) finds beneficial effects of the merging firms’ similarity with respect to product technologies, other authors (Barney, 1986; Salter and Weinhold, 1978; Harrison et al., 1991) provide theoretical arguments that, in the case of a low level of relatedness with respect to market positioning, the involved firms can benefit from each other and also exploit synergies.

Research with respect to the second category (internal relatedness) has focused on the merging firms’ management styles (typically considered as a specific facet of organizational culture; Chatterjee et al., 1992; Datta, 1991; Datta, Grant, and Rajagopalan, 1991), premerger performance (Hambrick and Cannella, 1993; Ranft and Lord, 2000), and strategic orientation (Cartwright and Cooper, 1992; Jemison and Sitkin, 1986; Ramaswamy, 1997; Salter and Weinhold, 1981). On an overall basis, empirical and conceptual work in this area provides strong evidence that low internal relatedness is detrimental for M&A success. Phenomena associated with low internal relatedness include, among others, employee resistance (Larsson and Finkelstein, 1999), internal turbulence (Ranft and Lord, 2000), and reduced employee retention (Hambrick and Cannella, 1993).

In summary, we find that a significant body of research has addressed the concept of (external or internal) relatedness in M&A. With respect to the findings of previous research, it is worth noting that low internal relatedness is frequently reported to have detrimental effects on M&A performance. On the other hand, there are more conflicting findings with respect to the impact of external relatedness on M&A performance. It is worth emphasizing, though, that our work adopts a different perspective compared to previous research. More specifically, previous studies

have typically analyzed the effect of relatedness on M&A performance. In our study, relatedness is a moderator variable rather than an antecedent of performance. In other words, previous research has studied how relatedness itself affects M&A performance while we analyze how relatedness affects how integration should be carried out (in terms of speed). This issue has not been studied in previous research.

Tasks

Comprehension

1. State the following

• the topic the authors of the article touch upon

• the main problem of the research addressed in the article